The Role of Innovation in New Product Development: Three Approaches for Success

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Innovation is essential throughout the entire new product development (NPD) process, but nowhere is it more key than it is in the Fuzzy Front End (FFE) stage. FFE is the starting point of NPD and is where new product ideas are generated before entering the formal development process. Developing a strategy here is key in creating an efficient and cost-effective idea generation process, but how should you approach this?

In this blog we will share how crowdsourcing, incremental, and breakthrough innovation can be used as part of your NPD strategy throughout the FFE stage. We will also share how leading brands; Apple, Dyson, and Lego, have used these tactics to develop new products and become leaders in their field.

This graph from ResearchGate illustrates the Fuzzy Front End of main stream NPD and shows that idea generation is the start of the front end process.

3 Successful Approaches to Innovation in New Product Development

1.  Crowdsourcing New Product Development: The Lego Approach

As the name suggests, crowdsourcing means ‘outsourcing to the crowds’. Crowdsourcing allows businesses to target internal and external participants to share their ideas and suggestions via questionnaires, competitions, promotions, and other methods.

In new product development crowdsourcing can generally be used when you have a rough idea of the direction you to go in. Crowdsourcing is a great tactic to expand upon the initial seeds of an idea by using the wisdom of crowds. Launching challenges and campaigns to target specific people, whether external or internal, will open your idea to a wealth of knowledge that can help shape and determine your product framework.

Lego use their customers as a source to gather new ideas, strengthening brand loyalty and creating an efficient ideation process.

The Lego Company for example, consistently use crowdsourcing as a means of sourcing new product ideas, using their community to contribute to the creative NPD process. On the Lego Ideas site community members can submit their ideas according to Lego’s Product Idea Guidelines. If an idea gains 10,000 supporters (or votes) from other members, it is considered for production in a ‘Lego Review’. This occurs 3x a year and is held by the ‘Lego Review Board’ consisting of designers, product managers, and other key team members. The original idea submitter will receive 1% of the total net sales and complimentary copies of the Lego idea set.

Here Lego have created a continuous process of generating a pool of new ideas. They have factored in evaluation and collaboration techniques from their target market – their community members, resulting in products that are directly aligned with existing demand. By approaching innovation in this way, Lego also benefit from improved customer engagement and brand loyalty, and save on time and resources that would have been invested in customer research.

2. Incremental New Product Development: The Apple Approach

Incremental innovation is defined as making a series of small improvements made to a company’s existing products or services. Often starting as a basic product, incremental innovation provides a framework for adding additional functionalities and developing new products from there.

One of the most famous examples of incremental innovation in NPD is the Apple iPhone. According to to f3fundit “the iPhone itself was a result of incremental innovation, coupled with the foresight to exploit a market need”. When the first iPhone was launched in 2007 there were already variations of the smartphone available, but none had been as popular.

Of course all phone companies employ incremental innovation with annual upgrades, but the key to Apple’s success is the company’s customer centric approach. When the iPhone was first launched, Steve Jobs emphasized the message that this product had all the capabilities of three separate products – touch screen ipod, phone capabilities, and internet access, but the real selling point was the product’s user experience. Voxco explains, “Apple not only delivered a better customer experience, they changed the game on Mobile Customer Experience entirely, which allowed them to leapfrog veterans in the smartphone segment and create a user base that were willing to buy into the Apple ecosystem”.

With each upgrade of Apple’s product, the focus remains the same – to not only use technology to enhance their products but keep customer centricity at its core. Incremental innovation can be far easier to implement into your new product development process than breakthrough innovation, for example, and can be sourced from client suggestions, internal process improvements, employee ideas, and an efficient R&D department.

3. Breakthrough New Product Development: The Dyson Approach

Breakthrough innovation or disruptive innovation is defined as “innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market-leading firms, products, and alliances”.

The role of breakthrough innovation in new product development is rare as it requires the introduction of an entirely new product that consumers would not necessarily see coming but adopt very quickly. These innovations often come from extensive research, experts, and scouting for startups and technologies that can be used to adapt existing offerings.

One of the biggest innovation breakthroughs in the past 50 years comes from Dyson. James Dyson created a new technology when the air filter where he worked kept clogging with dust, he therefore designed and built an industrial cyclone tower which removed the particles using centrifugal force. He used this technology to create his first vacuum cleaner prototype.

Dyson then took his prototype to several existing vacuum cleaner manufacturers, yet they all rejected his idea, arguably too afraid of such a disruptive change that they failed to see the opportunity it offered. Had these manufacturers taken on Dyson’s prototype they would have had a breakthrough product in their market. Dyson eventually obtained investment and launched the G-Force vacuum cleaner and went on to open his research and development center.

Dyson engineers are never satisfied.

Breakthrough innovation is rare but from Dyson we can learn that a culture of innovation in essential. Partnering with new technologies, that may lead to disrupting existing products, should not be feared as it could lead to a market breakthrough.

Utilizing a scouting tool, such as Q-Scout, can provide an effective means of finding new lucrative opportunities and sourcing new technologies that have the potential to grow new market changing products.

Tools for Idea Generation in the NPD Process

The Fuzzy Front End stage of New Product Development is the most essential and creative part of the process, but it is often unstructured. Deciding on an approach can provide structure and efficiency to the process, ultimately leading to time and cost savings.

Whether you decide upon utilizing the wisdom of crowds to gather new ideas and continuously improve existing products, or scout for new opportunities that could lead to breakthrough ideas, having tools to assist you is vital in streamlining the process.

Utilizing tools such as Qmarkets’ suite of collective intelligence solutions allows you to track opportunities for mergers and acquisitions, and crowdsource ideas from your employees or customers that can lead to both incremental and breakthrough innovations.

The role of innovation in new product development is obviously essential, but taking a dedicated approach can deliver more opportunities to create growth driving products.

To find out how Qmarkets’ can help you integrate innovation management into your new product development strategy, don’t hesitate to contact us today. 

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